case studies

Setting aside a Declaration of Trust on the basis that it was a mistake

A family consulted solicitors and accountants to discuss ways of providing for succession in their business and eventually passing the business over to the children of the family.

Without proper and considered advice from their advisors, one suggestion that was made was a declaration of trust to transfer all of their assets to the children.

The parties signed the document without appreciating the significance of it, i.e. that it transferred the entire wealth of the parents to their children.

It was many years later when the parents were advised by us on the significance of that document, which had been placed in a filing cabinet and forgotten about.

The parents had not intended to transfer their wealth and at the time had wanted to retain control of their assets and business.

An application to court was made to set aside the document. The witness statement evidence included the diary evidence over an 11 year period from the company accountant which helped to explain how the document came into existence and also how the parents did not realise the extent of what they had done.

The declaration of trust was set aside by Mr Justice Evans-Loombe and claims were brought against the professional advisers, which were compromised by agreement.